Part of the Hokkan HD Group, PT.Hokkan Indonesia was
formed to take advantage of the knowledge gained in aseptic
production by the Group in Japan. The Group was also looking
to enter the beverage market in Indonesia, which is one of the
best-performing emerging countries with a GDP growth in 2011 of
6%.

This continuing growth in the economy, together
with an increasing population, has led to a significant jump in the
consumption of beverages in Indonesia over recent years. As
Indonesia's growing "middle-class" with more expendable income is
looking for new experiences and tastes, the global trend of
urbanisation - with more people living within the main conurbations
of major cities - is reflected in the country's consumption
patterns which are expected to continue to grow. Under these
circumstances, the Hokkan Group entered into partnership for a
joint venture with the Toyota Tsusho Corporation, part of the
Toyota Group, one of the largest trading companies in Japan, and
the sixth largest in the world. The partners are hoping the
joint operation makes a real impression in the Indonesian PET
bottle market, where it is a co-packer - primarily for soft drinks
- and contracted aseptic filler. The bottle manufacturing
facility has a potential capacity of five million cases each year -
or 150 million individual bottles - and the aseptic process makes
it possible to manufacture high quality, lightweight products, with
a flexible bottle design and a long product shelf life.

Expected switch to healthy beverages

PT.Hokkan Indonesiais now producing a wide range of
non-carbonated soft drinks, such as coffee-based, tea-based and
milk-based drinks, along with fruit and sports drinks to meet local
consumer demand. Similar to a current trend taking place
around the world, Indonesian consumers are likely to become more
health-conscious too over the coming years with younger people in
particular already demanding conveniently packaged, healthy
products. Dairy products, such as drinkable yoghurts, are
already one area that has been positively impacted by the emerging
trend, with single-serve, "on-the-go", rigid plastic formats
performing particularly well currently. "From our experience
inJapan, we know that aseptic technology can achieve lightweight
bottles, a flexible bottle design and long product shelf life.
Aseptic technology offers us numerous opportunities for
making quality products," said Masaaki Ikezawa, President of
PT.Hokkan Indonesia.

Although the purchase of
healthy beverages, such as sour milk drinks and sports and energy
drinks, is not yet common practice amongst other Indonesian
consumers, increasing awareness of health issues, accompanied with
rising disposable income, is set to spark a change in habits.
PT.HokkanIndonesiaexpects naturally healthy and fortified products,
including speciality Asian drinks, bottled water, powder
concentrates, fruit and vegetable juices, functional drinks and RTD
teas to grow significantly in sales over the coming years.
Packaging formats in the country tend to be 'single-serve' now,
with most drinks packaged in PET bottles. Demand for
returnable glass bottles has declined substantially over the last
couple of years, mainly through one producer switching production
from glass to one-way PET bottles. The increasing use of PET is
down to a number of factors: its 100% recyclability,
excellent barrier material properties that allow extended shelf
life, bottle design freedom and the greater brand recognition
possibilities offered by the package transparency. Being
re-sealable, light and compact, the PET bottles are also more
convenient for the customer as they do not have to be consumed at
one time and are far more suited to the dynamic urban lifestyles of
younger Indonesian consumers.

An understanding supplier

The philosophy driving PT.Hokkan Indonesiais the pursuit of the
best possible quality for its customers. The transfer of the
experience and knowledge of aseptic production gained by the Group
inJapanwas seen as key in providing safe packaging technology and
optimum product quality in the new plant in Indonesia. Rather than
gaining market share from existing suppliers to the Indonesian
market, Hokkan sees itself attempting to create a new aseptic
market, in which it strongly believes, for the Indonesian consumer.
With the experience of Nihon Canpack gained inJapan, the Group felt
comfortable that Sidel fully understood its focus on product
quality. Cost, of course, was important although not its
priority, as the Group was intent on quality and fast start-up of
the installation. Being a co-packer, flexibility of the line
- especially in the design and format of the bottles produced - was
also an important consideration.

The experience and expertise to respond to market
demands

The manufacturing plant, which is located jus t50 kilometres to
the south of central Jakarta, has ample supplies of fresh natural
water drawn from three wells. It is also close to Sukabumi
city and benefits from an established distribution network in
nearby Jakarta. PT.Hokkan Indonesia made the decision to
invest in a PET aseptic line, including a wet aseptic Combi
Sensofill FMa. The Combi PET systems combine blow moulding, filling
and capping in a single integrated system. They optimise layouts by
eliminating conveying, empty bottle handling, accumulation and
storage and therefore have a smaller footprint. They improve
packaging hygiene, ensuring food safety - a single enclosure making
it easier to keep hygiene under control along with other hygiene
options. The flow meter Sensofill™ FMa filler can handle a broad
variety of products - including both high and low acid products,
still beverages or products with pulps - in containers from 200 ml
to2 L. It manages all bottle finishes and accommodates both flat
and sport caps. The line was also equipped with Sidel's EIT™ -
Efficiency Improvement Tool - the automated data acquisition and
information system, which enables instantaneous, remote connection
to the plant floor in order to make it possible to monitor closely
and analyse production data.

The choice of the Combi Sensofill FMa to blow, fill and cap the
drinks produced, was partly influenced by the small compact
footprint of the machinery, as well as the energy-saving
possibilities, reduced manpower and lightweighting benefits of the
Sidel equipment. PT.HokkanIndonesiawas also pleased with the
collaboration with the Sidel team on the design and development of
the new bottles. "We let the professionals do the job of
bottle design. Sidel studied market trends and came up with a
good solution that met customer needs and matched the Indonesian
market culture", said David Chendra, General Manager of PT.Hokkan
Indonesia. The customer alone could not have researched local
market trends and the most practical designs to fulfil consumer
demand due to time and cost implications. Conversely, Sidel,
had the experience and expertise to respond quickly in handling the
research and turning around the designs in a relatively short time.
The supplier did so successfully, meeting the different cultural
approaches and needs of the market to deliver a professional
solution. The finished designs evaluated and tested well
before production started.

Providing the right solutions

The Hokkan Group sees Sidel as the company leading innovation,
flexibility and production rates in PET bottling. In theFar
East, just as in the West, there is growing concern about the costs
- both financial and environmental - of raw materials and power
consumption. The Group therefore looks to Sidel to provide
solutions in reducing the use of materials and energy, in
increasing savings, extending the possibilities of lightweighting,
retaining quality and extending the shelf-life of its sensitive
products. "In our view, Sidel is a company that leads the
field of innovation, bottle design, flexibility and services.
We will continue to work with them to find ways to further reduce
energy consumption and they have presented a highly innovative
solution for using bio-material. At PT.Hokkan Indonesia, we
appreciate this partnership," said Ikezawa.

New business opportunities based on this
success

Following the success of the first aseptic line, PT.Hokkan is
now evaluating investment in a second, looking into the possibility
of using a Combi Predis FMa. This system is configured with
Predis, Sidel's dry preform decontamination technology, integrating
all the preform decontamination, blowing, filling and capping
functions into a single production enclosure. Predis enhances
production flexibility by replacing wet bottle sterilisation with
dry preform decontamination, removing the need for rinsing water.
It helps to protect liquid packaging from micro-organisms,
preserving sensitive drink integrity and lengthening shelf life.
This second aseptic line, equipped with the proven dry preform
decontamination solution from Sidel, would be designed to further
extend the capacity that PT.Hokkan Indonesia has for producing
sensitive beverage products.

First move into foreign markets

In 1997, the Hokkan Group first joined up with Nestlé with the
intention of expanding their 'beverage commissioned business' by
forming Nihon Canpack Malaysia Limited to take advantage of the
growing market inSouth East Asia. Ten years later the Group
also entered the Vietnamese market as a contracted filling
company. Its subsidiaries Hokkai Can Company and Nihon
Canpack Limited both follow the established strategies of
comprehensive contracting, manufacturing and filling of PET bottles
for the soft drinks market. The manufacturing capacity of the
Hokkai Can Company is also used in tandem with product development
capabilities of Nihon Canpack to undertake contracted manufacturing
of food and beverage products for local producers - as well as
those in Europe, th eUnited States and Japan.

Partnering with Toyota

The Group's partner in the PT.HokkanIndonesiaundertaking, the
Toyota Tsusho Corporation, is based inNagoyaandTokyoand a member of
the Toyota Group.

Although the automotive business remains its main focus, its
mission now is to address society's needs and to develop new
business models. Since 2006, it has been actively moving into
non-automotive fields, through several different ventures into the
food industry. Hokkan Holdings own 70% of the joint venture,
with the Toyota Tsusho Corporation, which first entered the
Indonesian market in 1974, holding 30%. Having past
experience of the Indonesian market, Toyota Tsusho will utilise its
local knowledge and the commercial networks already established
over the intervening years, to good effect on behalf of the
Indonesian undertaking. Following their jointly agreed plan,
Toyota Tsusho provides the raw materials, resources and overall
corporate management for the Indonesian plant, with Hokkan
responsible for manufacturing, quality control, packaging and new
product development. Both parties are responsible for
marketing.